SFEN Position Paper 13.05.2020 Nuclear new build must be part of the French economic recovery plan Introduction Whilst the primary concern remains the management of the COVID-19 health crisis, and successful easing of lockdown measures, recovery of a severely impacted economy is also of major national concern. During the crisis, the French nuclear industry (through its representatives, the CSFN1 and GIFEN2) encouraged an ongoing dialogue with the Government. The objective was to ensure the continuity of the public service of electricity provision, essential both for supplying hospitals and emergency service communications, as well as making teleworking for millions of French people and maintenance of essential services possible. It was also a question of guaranteeing, within the industry itself, the safety of employees, and the economic health of many small companies across the supply chain. As the economy exits from lockdown, it is essential that the economy recover, and governments are preparing ambitious recovery plans. Many economists3,4, several international organisations (World Bank5, International Energy Agency) and expert committees (French High Council for Climate6), have started discussing the criteria that these recovery plans must meet, including objectives to limit the economic and social consequences of the crisis, as well as paving the way for a ‘New World’. If this ‘New World’ is to align economic growth with climate objectives, nuclear power has a central role to play. As the third largest national industrial sector in France, well-established regionally and a strong exporter, the French nuclear industry is one of the engines of recovery. This is particularly true of EDF’s maintenance and investment programme for long-term operation of the nuclear fleet, known 1 CSFN: French Nuclear Industry Strategy Committee 2 GIFEN: French Nuclear Industry Association 3 Thinking post-crisis: reconstruction rather than recovery. P. Criqui and S. Treyer, The Conversation – 24 April 2020 4 After the crisis, the time for green money. Th. Piketty, Le Monde - 9 May 2020 5 Planning for the economic recovery from COVID-19: a sustainability checklist for policymakers. Stephen Hammer and Stéphane Hallegatte - 14 April 2020 6 Climate, Health: better prevention, better cure - accelerating a fair transition to strengthen France’s resilience to health and climate risks, French High Council for the Climate - April 2020 1 as ‘Grand Carénage’, which represents an essential source of activity for the sector with 4 billion euros per year7 and 1,000 companies involved. The sector also has several investment projects under development, as part of a nuclear sector deal signed in early 2019, in particular in the digital field (e.g. digital platform within the framework of GIFEN), as well as training and skills (e.g. ‘University of nuclear’). In addition to investments in the existing fleet, the 2019-2024 French Multi-Year Energy Plan (Programmation pluriannuelle de l’énergie - PPE) has set up a work programme designed to inform decisions, by mid-2021, on building new nuclear reactors. These new constructions would gradually renew part of the current nuclear fleet from 2030 and secure a low-carbon, dispatchable source of electricity, alongside renewables, by 20508. If opted for today, these investments would contribute significantly, right now and for several years and decades to come, to growth and jobs. This SFEN position paper has been produced by the SFEN ‘Economy and Energy Strategy’ Expert Group to highlight how the nuclear new build programme will contribute to the recovery plan. In the electricity sector, where investments are essential in the long-term, the response of the American President Franklin Roosevelt to the crisis of 1929 provides much insight, as the New Deal "sought to drive three areas of action: emergency intervention, recovery, and a profound change in the social project (relief, recovery, transformation)"9. This position paper focuses on the last two objectives: recovery and transformation. Summary The decision to launch the proposed nuclear new build programme with 6 EPRs would be an effective stimulus for the French economy. Its effects would be significant from 2021 onwards, in line with long- term strategic objectives. 1. Construction of an EPR, a strategic infrastructure, would create many short-term jobs in the nuclear supply chain, where the share of French companies is estimated at more than 80%. This would mitigate the effects of the crisis in other industrial sectors. It would also consolidate sector skills, at a pivotal time for the industry with the commissioning of the first EPRs, where many lessons have been learnt, and trigger the series effects necessary to ensure the competitiveness of nuclear new build. Nuclear new build, with one of the lowest rates of imports in its value chain, would also have a strong ripple effect on the rest of the economy (in France, each euro invested in nuclear generates 2.5 euros in the rest of the economy), in particular at the local level where the plants will be constructed. The programme has already reached several key milestones towards enabling a decision to be taken by mid-2021. 2. In the ongoing debates on the ‘New World’ after the shock of COVID-19, nuclear energy ticks three essential boxes: it is one of the key contributors to achieving France’s climate objectives; it is essential for guaranteeing the resilience of the electrical system to future shocks; and it is the 7 EDF - 2019 financial results. The 4 billion is divided into 3 billion euros for routine maintenance and 1 billion euros for large- scale renovation works. Source: SFEN report on the production costs of the nuclear fleet - September 2018 8 SFEN report, ‘When to decide about the renewal of the French Nuclear Fleet?’ - April 2019 9 Thinking post-crisis: reconstruction rather than recovery. P. Criqui and S. Treyer, The Conversation – 24 April 2020 2 backbone of France’s energy and industrial sovereignty. In addition, the nuclear industry will be the ally of European re-industrialisation strategies, providing competitive low-carbon electricity to 4.0 factories, as well as its technologies and expertise in industrial innovation. The nuclear community is ready to mobilise and participate in the economic recovery efforts and, as such, contribute to the transformation of our society. 3 1. Launching a programme to build new nuclear reactors will be an effective tool for economic and social recovery from 2021 Foreword: strategic infrastructure has been at the heart of recovery plans historically; nuclear must play this role today. Investment in infrastructures has been a key component of recovery plans from their inception. President Roosevelt's New Deal10 included the creation, in 1933, of the Tennessee Valley Authority (TVA), with many hydroelectric dams built on the river in the 1930s and 1940s. At the end of the war, TVA was the first producer of electricity in the USA, powering, among other things, aluminum production plants (electrolysis), and contributing to the development of the region (more than 1,000km of waterways were constructed, forests were replanted, and cultivation methods improved). The same was true of the Marshall Plan in Europe after the Second World War. Another example, in France, is the construction of hydroelectric dams at the start of the French ‘Glorious Thirty’. During the recovery plan after the 2008 financial crisis, the French State11 invested 700 million euros in low-carbon transport infrastructure and energy efficiency, and 400 million euros in road programmes (renovation and new). The nuclear fleet is one of France's key strategic infrastructures. The fleet of 57 operating reactors, across 19 sites, produces low-carbon electricity which is available on demand 24 hours a day. The nuclear fleet guarantees supply for urban areas (more than three quarters of the French population) and more than 250 industrial customers, representing 530 sites which are directly connected to the electricity transmission system operator (RTE). By providing stable electricity at affordable prices, it contributes to the competitiveness of French industry. In addition, its environmental impact is minimal relative to the energy produced (75% of the electricity of a large developed country), be it CO2 emissions, noise or visual pollution, consumption of raw materials or land footprint. The construction of new nuclear reactors is fully in line with a move towards economic recovery through sustainable infrastructure projects suggested by many organisations, including the French I4CE12. The programme under review includes the construction of a series of six EPRs, three pairs at three successive sites, corresponding to the renewal of a production capacity of 10GW, or 15% of the current French fleet. To date, three French regions have volunteered to host these projects: Normandy (Penly site), Hauts de France (Gravelines site) and Auvergne Rhône-Alpes (several current sites). The total annual investment cost of the programme for the whole community (private and public stakeholders), has been well estimated, in order of magnitude, at 2 billion euros per year13 during the 10 Name given by President Franklin Delano Roosevelt to his interventionist policy to combat the effects of the Great Depression in the United States. 11 Towards a recovery plan? Learning from 2008, I4CE. - Q. Perrier - April 2020 12 I4CE - Investing in the climate will help us get out of the crisis. The Institute offers, alongside thermal renovation of buildings and construction of renewable energy installations, the construction of new public transport infrastructure, as well as the renovation of railway lines. 13 SFEN estimate on the basis of an average cost of 4500 €/kWe over twenty years (7 years of construction, with a 2-year lag between each reactor) 4 construction phase (for the record, public contributions to renewable electrical energy in France is estimated for 2020 alone at more than 5 billion euros14). As such, the launch of the programme in 2021 would have a double stimulus effect: for the nuclear sector, and for the rest of the economy.